Hotel chains employ "mystery shoppers" to secretly check the service quality at franchised hotels. Suppose that you are a franchisee operating a hotel in a chain. Why would you support such secret inspections of other franchisee hotels in the chain?
A) Other franchisees might shirk on the quality of service.
B) The demand for my business depends on the service of other franchisees.
C) Other franchisees might impose a negative externality on my business.
D) a, b and c.
E) None of the above.
Correct Answer:
Verified
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